COPT Defense Properties, a real estate investment trust (REIT) focused on properties near U.S. government defense installations, reported a significant turnaround in its financial performance for the fiscal year ending December 31, 2024. The company achieved a net income of $143.9 million, a substantial increase from a net loss of $74.3 million in the previous year. This improvement was primarily driven by the absence of impairment losses, which had totaled $252.8 million in 2023. Total revenues rose to $753.3 million, up from $685.0 million in 2023, reflecting a 10% increase year-over-year.
COPT Defense's operational metrics also showed positive trends. The company reported an occupancy rate of 93.6% across its total portfolio, with its Defense/IT Portfolio achieving a higher occupancy rate of 95.6%. The tenant retention rate reached a near-record 88.6%, with average cash rents for renewed leases increasing by 1.0%. The company successfully leased 388,000 square feet of vacant space, exceeding the amount vacated upon lease expirations. These metrics indicate a strong demand for the company's properties, particularly those serving national security and defense needs.
Strategically, COPT Defense made notable acquisitions and developments during the year. The company acquired two operating properties for a total of $32 million, adding significant space to its portfolio. Additionally, COPT Defense commenced development on four properties, totaling approximately 606,000 square feet, which are expected to meet future demand from government and contractor clients. The company also expanded its land holdings, acquiring 365 acres in Iowa for potential future data center development, reflecting its commitment to growth in high-demand areas.
As of December 31, 2024, COPT Defense's workforce comprised 427 employees, with a focus on maintaining a diverse and skilled team to support its operations. The company emphasized its commitment to employee engagement and development, which is critical given the competitive nature of the commercial real estate market. COPT Defense's ability to attract and retain talent is essential for its continued success, particularly in managing specialized properties that require high security and technical expertise.
Looking ahead, COPT Defense expressed optimism about its growth prospects, driven by ongoing demand for secure facilities and data center space. The company plans to continue leveraging its strategic position near key defense installations and investing in properties that align with its Defense/IT strategy. With no significant debt maturing until 2026 and a robust liquidity position, COPT Defense is well-positioned to capitalize on future opportunities while navigating potential market challenges.
About COPT DEFENSE PROPERTIES
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